Open Core  Open Source Friend or Foe?

Open Core is currently the hot topic in the blogosphere. We take a look at where Open Core comes from, and the arguments for and against it as a business model.

Open Core is currently causing quite a stir in the blogosphere
as of late, with countless individuals voicing their opinion for,
or against, Open Core as a business model.

Open Core’s roots can be traced back to 2008, when Andrew Lampitt coined
the term to describe a dual licensing model. Lampitt described his
vision of the Open Core / dual license, as the vendor owning the
intellectual property of a product, and choosing to license it
under both a commercial license and an open source license. This
means releasing the ‘core’ product as open source – he suggests the
GPL license – whilst offering proprietary add-ons and additional
support, as required.

At the time, he acknowledged that Open Core is a potentially
controversial business model, as segmenting based on features and
not based on user base is unpopular amongst certain areas of the
open source community. Lampitt admitted that “this model did not
work for some vendors in the past due to ‘angering the community”
and theorised that this anger arises from a fear of commercial
companies exploiting the term ‘open source’ for their own financial
gain. He argued that renaming the dual license to Open Core, would
effectively take some of the sting out of a co-commercially and
-open source licensed product.

What are the arguments for Open Core? According to Lampitt, Open
Core users often receive most of the benefits of a
traditionally-licensed open source product: they can use it for
free, sometimes permanently; have the added security of being able
to modify the product to suit their own needs, and the option to
continue developing the product even if the vendor decides to stop
working on it.

“My feeling is that we would save a lot of confusion for
communities, customers, and vendors if all recognize that a dual
license ”open core” model is a sensible business model for all
involved,” he concluded, back in 2008.

However, Open Core has since met some opposition, with OSI board
member Simon Phipps referring to it as “a game on software freedom” and claiming it
exploits loopholes in open source. Open Core has led him to call
for a re-defining of the software freedom “game.” Although Phipps
has no issue with the core open source package this dual license
delivers, he claims that to use the product in a commercial
setting, one would eventually have to purchase the proprietary
add-ons. This ties you into the vendor, and you forfeit the
aforementioned benefits of open source: you are suddenly part of a
community of co-users, not co-alternative-developers; and you have
to abide to the vendor’s decisions regarding how their product
develops. By offering the initial product as open source, Open Core
is, in Phipps’ opinion, using “a bait-and-switch”to lure the user
into vendor lock-ins.

Brian Aker has also expressed his opinion against
Open Core, asking his blog visitors to consider how many open
source products have launched successful companies, before stating
“there has been no successful launch of an open core company that
has reached any significant size……Open Core is a dead on
arrival business model. We should realize this and just move
on.”

Meanwhile, Giuseppe Maxia has expressed a more pragmatic approach, suggesting that the
100% open source business model does not work for everyone.

“Before saying “you should do like RedHat“, ask yourself if your
project meets the same conditions that have made RedHat an open
source commercial success. And by same conditions I mean not only
the target users, but also the environment, the skilled engineers,
the community, and probably the vision that put the company in the
right place at the right moment,” he advises.

Maybe keeping your users happy whilst prospering financially,
are ultimately more important than keeping your business model
“pure” and 100% open source.